The U.S. took steps Wednesday to withdraw from a global system of postal rates that allows China and other countries to ship packages to America at a steep discount, costing U.S. taxpayers as much as $300 million per year and allowing a flow of illegal narcotics.

A senior White House official said the State Department formally notified the Universal Postal Union, a coalition of 193 countries, that the U.S. intends to withdraw from the pact within 12 months if the administration can’t negotiate more favorable shipping rates.

“People are getting hurt in this country by an unfair system,” the official said. “We’re initiating the withdrawal process today. We’re going to try to negotiate in the meantime.”

Under the current UPU system, a one-pound package shipped by a U.S. business costs between $10 to $13. But China pays only about $2.50 for shipping in the U.S., the official said.

“The U.S. postal services winds up picking up the tab for that,” said the official.

National Association of Manufacturers President and CEO Jay Timmons said President Trump “deserves tremendous credit for the administration’s focus on eliminating the anti-U.S. manufacturer subsidy China receives from the U.S. Postal Service.”

“This outdated arrangement contributes significantly to the flood of counterfeit goods and dangerous drugs that enter the country from China,” Mr. Timmons said. “Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China.”

White House officials said the move is not aimed at China specifically, noting that certain European countries such as Germany and France also benefit from what they called unfair international postal rates.

U.S. officials say the growth of transactions on the internet is facilitating a high level of counterfeit goods shipped to the U.S., as well as narcotics and fentanyl, with the aid of the lower shipping costs.

“We expect it to have a major impact on the counterfeiting and some impact on the narcotics,” one official said. “It’s not a panacea by any means. This will make some contribution [to curbing illegal drug imports].”